Indian Shares Seen Opening Firm

4/11/2012 11:10 PM ET

Indian shares are seen opening higher on Thursday, mirroring a rebound on Wall Street overnight and across Asia this morning, as a slight drop in yields on Spanish and Italian government debt and Alcoa's surprise quarterly profit lured bargain hunters. Underlying sentiment, however, remains cautious amid geopolitical risks as North Korea prepares for a widely-criticized rocket launch.

Closer home, investors await February industrial output data due out today, with many expecting a moderation in manufacturing growth after January's surge. Rate-sensitive realty, banking and auto stocks could be in focus on expectations for a policy rate cut by the Reserve Bank of India at its policy meet next week.

Indian shares ended yet another lackluster session on a flat note on Wednesday, as investors reacted to recent disappointing economic data from the U.S. and China, rising bond yields in Spain and Italy and a tsunami warning issued in 28 countries, including India. The benchmark 30-share Sensex moved in the range of 17,076-17,319 before ending down 44 points or 0.26 percent at 17,199, while the broader Nifty index fell 17 points or 0.32 percent to 5,227.

Provisional data released by BSE shows that foreign institutional investors remained net sellers in Indian equities and sold shares worth Rs.445.77 crore yesterday, while domestic financial institutions sold shares to the extent of Rs.82.24 crore.

U.S. stocks turned in a strong performance overnight, regaining some ground after recent sharp losses, as investors cheered aluminum giant Alcoa's quarterly results and the Fed's latest Beige Book report, which showed that the economy continued to expand at a moderate pace from mid-February through late March. Paring some early gains, the Dow and the S&P 500 ended up around 0.7 percent each, while the tech-heavy Nasdaq rose 0.8 percent.